Few professional credential programs today have the prestige or the recognition that the Chartered Financial Analyst (CFA) designation from CFA Institute, Virginia, does. Just about 15 years ago, the CFA was considered more of a Western phenomenon. Yet, today, Asian candidates dominate the candidates who take each level of the exam as well as those who clear it. Till about 2010, the CFA designation was considered relevant only for those who wanted a professional career in investments. Today, though, consultants, corporate finance managers, and even general managers are aspiring for this credential. As a result, many MBA applicants too have begun to wonder on the role o the CFA for MBA admissions. Is the CFA helpful for MBA candidates? Are there CFA exemptions for MBA applicants to top schools? This article hopes to address this and many other questions.
The relevance of the CFA to MBA studies
Over the years, the CFA has acquired a status almost parallel to that of the CA itself. Yet, the CFA is shorter, and requires no officially certified internships (though it does require relevant work experience) than the CA (Chartered Accountancy) programs across the world. In fact, many candidates who already have the CA certification find that adding the CFA to it is relatively easier. The point remains – is the CFA helpful for MBA studies, and is the CFA helpful for MBA admissions?
Lets address the part around the utility of the CFA to MBA studies first. In many programs around the world, preparation for the CFA curriculum is offered as part of MBA studies. Even in those programs that do not offer it, possessing the skill-set offered by the MBA can give an MBA student a significant edge in excelling at coursework, at least with respect to courses in Finance, Economics, and Investments. If one carefully scrutinizes the Dean’s Lists of top B-schools around the world, on those lists one would find many CFA charter-holders.
Is the CFA helpful for MBA admissions?
The simple answer is – yes, it is. The complete answer is a bit more complicated – read on. Some MBA programs (such as the Rotman MBA program in Canada and the CUHK MBA program in Hong Kong) love the CFA so much that they will provide a GMAT exemption for candidates who have the CFA! Yes, that means applying to (and getting through, in many cases) these programs without the GMAT/GRE requirement.
Most programs, though, will not offer a test exemption to CFA charter-holders. Rather, they will provide some credit to the person’s application if he/she holds a CFA. Here is where things start getting a bit complicated. Around 2011-12, relatively fewer people achieved or applied for the CFA, so having the CFA credential was more rare. Today, that is no longer the situation. Yes, achieving the CFA requires rigor, but there are more people taking the tests, and more passing them as well! Today, the CFA carries most value in B-school admissions if one’s work is aligned to the CFA charter itself. For example, applicants in IB/PE/VC or even Corporate Finance, and to a lesser extent, Corporate Accounting roles, will get greater credit for the CFA. Some others in allied but non-Finance areas, such as consulting, research, or even financial services advisory, will get some credit as well.
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What about those who work in areas completely removed from the agenda and purpose of the CFA curriculum – like, say, IT applicants? First, someone who does not have qualified work experience (as defined by the CFA Institute) will not be able to receive the CFA charter even if he/she clears all 3 levels of the CFA. That person will also receive little credit for the CFA in MBA Admissions, simply because the CFA is not aligned to his/her past or future! At best, it will be given some importance for the rigor that clearing each level involves, but that’s it.
Applicants who have only cleared L1/L2 of the CFA
As the CFA has 3 levels to clear, there are many MBA applicants who try to make it through one or two levels before applying. That is great, and as noted above, it will help their learning and their grades during the MBA program, once they get through. However, there will be almost no credit available for clearing just the CFA L1 in MBA admissions, and little for the CFA L2.
Pursuing the CFA post-MBA
Although a bit off-topic, the question on the utility of pursuing the CFA post-MBA must also be addressed. Similar rules continue to apply here as well – pursue the CFA charter if it aligns with your overall career goals, and not simply to add a bit of glean to the MBA. With plenty of e-learning and online certification options online today through platforms such as Coursera, finding advanced programs to supplement your MBA skills further and keep them contemporary should not be a problem.